Discovery Capital Corporation

Discovery Capital Corporation

July 13, 2007 09:00 ET

Discovery Capital Announces Revised Terms for Sale of Discovery Capital Management Corp. to Management of Discovery Capital

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 13, 2007) - Discovery Capital Corporation ("Discovery") (TSX VENTURE:DVY.Y), upon recommendation of the special committee of the directors (the "Special Committee"), has revised the previously announced agreement (as so revised, the "Agreement") for the sale of Discovery Capital Management Corp. ("DCMC") to management of Discovery ("Management Group") who hold in the aggregate, approximately 30% of the issued shares of Discovery. The revised terms provide for a purchase price of $1.1 million payable in cash on closing, plus 30% of the performance bonus earned by DCMC under its portfolio management agreement in the five years following completion of the transaction.

The Special Committee has recommended that shareholders vote in favour of the transaction.

In the Agreement, Discovery has agreed not to solicit or encourage or otherwise deal with any offer for DCMC unless the offer is unsolicited and would, if completed, result in a more favourable transaction for Discovery from a financial point of view. In addition, Discovery has agreed not to enter into an agreement with respect to another offer unless it first gives the Management Group the right to match the offer, and then only if the Agreement is terminated and Discovery pays the Management Group a break fee of $55,000 and reimburses the Management Group for its expenses of up to $35,000. The break fee and expense reimbursement are also payable if the Special Committee changes or withdraws its recommendation that shareholders of Discovery vote in favour of the transaction.

The transaction is to be approved as part of the approval of the previously announced proposed liquidation of Discovery. In accordance with the requirements of the TSX Venture Exchange, the transaction is also subject to approval by a majority of the disinterested shareholders of Discovery.

The directors have further approved August 21, 2007 as the date for the annual general and special meeting of the shareholders of Discovery ("Shareholders' Meeting") to consider and vote on the previously announced plan of liquidation of Discovery. The directors have also fixed July 13, 2007 as the record date for determining the shareholders of Discovery entitled to receive notice of and vote at the Shareholders' Meeting.

All particulars of the plan of liquidation and the sale of DCMC will be disclosed in a management information circular which is expected to be mailed to Discovery shareholders on or about July 23, 2007.

About Discovery Capital:

With over 20 years of venture capital experience in British Columbia, Discovery Capital is a venture fund manager through its wholly owned subsidiary, Discovery Capital Management Corp., and venture capital investor specializing in: information technology, communications, health and life sciences, and other advanced technologies. Discovery Capital has proven expertise in strategic planning, management development, innovative financing strategies, corporate governance and positioning for liquidity. Discovery Capital Management Corp. is the manager of British Columbia Discovery Fund (VCC) Inc., a British Columbia venture capital fund that has raised over $42.8 million to date and has investment interests in eleven developing technology companies.

For more information about Discovery Capital Corporation, please visit

John McEwen, President and Co-Chief Executive Officer

Harry Jaako, Chairman and Co-Chief Executive Officer

This news release may include statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond its control. Future events and results may vary substantially from what the Company currently foresees.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Discovery Capital Corporation
    John McEwen
    President and Co-CEO
    (604) 683-3000 ext. 106
    Discovery Capital Corporation
    Harry Jaako
    Chairman and Co-CEO
    (604) 683-3000 ext. 105
    Discovery Capital Corporation
    Charles Cook
    (604) 683-3000 ext. 102
    (604) 662-3457 (FAX)